Promoting Integrity across the Group

Mr. Susumu Akiyama: First of all, the AGC Group must make it clear across the Group that employees should not do anything contrary to the Group vision, and that even if they create economic value, if it comes at the cost of integrity, their actions and performances will not be appreciated.

Mr. Hayasaka: The AGC Group operates in countries and regions with differing legal systems and business practices. We make it absolutely clear that we will not tolerate employees who improve their business performance in violation of the Group's four Shared Values.

Mr. Mabon: At AGC America, we have formulated clear rules, and employees have a good understanding of the rules. We also make them aware of the Help Lines, and the Lines are actually being used.

Ms. One Akiyama: For the Help Lines to function appropriately, it is important for top management to commit themselves to ensuring the effectiveness of the Lines, for employees to be aware of the Lines through information communication in their business operations, and for the examples of improvement achieved through the use of the Help Lines to be introduced to employees across the Group.

Mr. Hasegawa: By incorporating “criteria” into “specific procedures” and encouraging employees to follow the procedures as part of their routine work, you can make them more aware of the importance of compliance and integrity. In addition to the already introduced compliance certificate, you can also distribute free-of- postage-charge envelopes to employees so that they can freely write their questions and concerns and submit them in the envelopes. Through such measures, you can ensure open communication between employees and their companies.

Mr. Hayasaka: The compliance certificate mentioned is designed to motivate employees to review their work and relevant systems from the viewpoint of integrity. Moreover, the certificate includes a column where employees are free to write down any compliance issues they face or any other comments. In contrast to the Help Lines, whereby we passively wait for questions, the compliance certificate serves as a more active interface in that it encourages employees to make their requests in the comments column.

Balance between Business Performance and Compliance

Mr. Mabon: At present, AGC America is striving to improve its business performance, but we still strongly recognize the need to ensure compliance in a well-balanced manner.

Ms. One Akiyama: Generally when people talk about business performance, they refer to short-term performance. In order to improve business performance in a sustainable manner, however, it is vital that you ensure compliance, and in the AGC Group, the top management clearly states that it will not be acceptable for employees to violate the Group's values even if in doing so they improve business performance. For the next step, the Group might need to link this top commitment with its management system such as a personnel evaluation system and try to create an open corporate culture where individual employees do not find themselves impaled on the horns of a dilemma.

Mr. Hasegawa: When companies recall their products due to a compliance violation, they are actually trying to regain trust from society by bearing the cost of the recall. Compliance risk management is indispensable to maintaining corporate brand value, and the company must adopt the mentality that there are no trade-offs between compliance and business performance.

Mr. Akiyama: To give a sporting analogy, investigation of the relationship between fouls in games and goals scored has revealed that football teams committing fewer fouls turn out to be stronger. These teams have established their tactics to avoid foul play and all the players are committed to attacking and defending for the team, all the while improving their individual abilities. I believe the same principle applies in the business world.

Mr. Hayasaka: It is indeed wrong to think that you cannot improve business performance while ensuring compliance. The top management of the AGC Group firmly believes that compliance is a premise for corporate activities. At present, we impose penalties for noncompliance, but we have yet to devise a method for rewarding deserving compliance efforts.

Mr. Endo: It would be best if we could develop an open corporate culture where employees can easily communicate their problems to others without being backed into a corner all alone, and desperately feeling they have to escape from the situation.

The Staff Departments Should Act Not as a Policeman but as a Coach

Mr. Akiyama: Employees in the line departments are daily taking on new challenges to provide customers with high value. The staff departments should support them in so doing. The staff departments, including the legal and internal audit departments, play an important role. If the staff departments just point out flaws to operating departments without also proactively contributing ideas to fix current problems and prevent future issues, the line department members will no longer consult with the staff departments.

Mr. Endo: I tell the staff in charge of environmental audits to act as a coach rather than a policeman. They shouldn't simply point out, “That is not good,” to the audited departments. Instead, they should consider why the department did not do well enough and help them find out what responsive measures need to be taken.Thinking together in this way will foster more open communication, which is why I instruct the auditors to act in this way.

Mr. Hasegawa: For the successful operation of the compliance system, the staff departments are indeed indispensable. They can provide a “safety net” to those who have nowhere else to turn.

Ms. One Akiyama: Once, when I was discussing compliance, I was asked, “Which do you envision by the term “compliance,” a zoo or a safari park?” A zoo is a place where animals are confined to cages and are prohibited from many activities, while a safari park is a place where animals can move freely under certain rules. I believe compliance should be fostered along the lines of a safari park, where the guards have to “support” each of the animals while ensuring that they do not violate the rules.

Mr. Mabon: Excellent employees, who are the keys to elevating the company's business performance, have more options, and want to work for a company in which they can take pride. I believe that companies like the AGC Group, which have values shared by all employees, can attract such excellent human talent.